Self-employed worse off than 20 years ago

Self-employed worse off than 20 years ago

Diane King

Published:10:37Tuesday 18 October 2016

Self-employed workers in the UK are earning less than they were 20 years ago, according to a new study.

The report from employment think-tank the Resolution Foundation cites the decline in full-time work and a falling share of self-employed business owners who have staff of their own as major contributions to the two-decade low.

The country’s self-employed workforce has in fact grown by 45 per cent since 2001-02, but earnings have fallen by around £60 per week over this period.

The study shows that weekly earnings for self-employed workers grew steadily in the late 1990s and early 2000s, but the financial crash saw pay rates stall. This was followed by wages dropping by a quarter following the financial crisis.

A recovery in earnings has been seen over the past year meaning that earnings are now at 1990s levels - around £240 a week. However, this is still 15 per cent down on what was being earned in 1994-95.

The report also found that of the country’s self-employed - 4.8 million, or 1 in 7 workers - the proportion of these who have staff working for them has fallen from 23 per cent to 11 per cent since 2001-02.

However, the proportion working over 40 hours a week has fallen from 51 per cent to 35 per cent.

Adam Corlett, Economic Analyst at the Resolution Foundation, said: “For many people, self-employment brings a freedom that no employer can provide. But the growth of low pay and short hours, along with a summer of protest about conditions, means that it’s no surprise some workers in the ‘gig economy’ feel that self-employment is just a positive spin on precarious work.”